Category: News

Without Blaming Lehman Directly, FASB Solicits Comments on a Repo Accounting Do-Over

Filed under: more mess to directly blame on the fall of Lehman Brothers and Uncle Ernie’s epic failure

FASB is being awfully kind to those who played a large part in that whole total financial meltdown issue by avoiding actual name-dropping in their latest exposure draft but we don’t need names to know who they are talking about. *coughLehmancough* Here’s the note from FASB yesterday:

The Financial Accounting Standards Board (FASB) issued an Exposure Draft (ED) today to solicit input from stakeholders on its proposal to improve the accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The FASB requests comments on this ED by January 15, 2011.

“During the global economic crisis, concerns were expressed about a narrow aspect of existing guidance for determining whether a repo should be accounted for as a sale or as a secured borrowing,” notes FASB Acting Chairman Leslie F. Seidman. “The proposals contained in this Exposure Draft seek to address these concerns by simplifying this guidance.”

You hear that? You’ve got until January 15th to draw up your fantastic comment letters (please don’t disappoint us, we haven’t seen a good comment letter since North Carolina State Employees’ Credit Union President James Blaine said of mark-to-market: “Theoretically arrogant; in practice insane; financially negligent and reckless. Other than that, I have no concerns.”) on this new repo accounting proposal.

Once again, FASB wants the input of the worker grunts to find out A) what the plan is and B) how they should go about implementing it.

Seeing as how comment letters are a hallmark of our fantastically cooperative profession maybe FASB is going about this the wrong way. After all, it would be the investors who relied on incorrect information on Lehman’s financial condition based on creative repo accounting (mind you, “creative” and “fraudulent” are not the same thing) who are most impacted by current rules and any changes, not the accountants putting together the financial statements. Surely they would know better than to rely on their own financial information.

If you are unfamiliar with the joys of repo accounting FASB has offered a quick primer:

In a typical repo transaction, an entity transfers financial assets to a counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. Topic 860, Transfers and Servicing, prescribes when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements. That determination is based, in part, on whether the entity has maintained effective control over the transferred financial assets.

The amendments in this proposed Update are intended to simplify the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as implementation guidance related to that criterion.

Clarification is always nice, I guess, but paint me skeptical, I don’t see additional guidance doing much for closing the giant gaping loophole that Lehman drove a truck through on its way right off the cliff.

(UPDATE) Area Man Searching for Accountant Addicted to Love

~ Update includes the spartan’s response to our request for comment.

No. Seriously.


Reportedly at LaSalle and Erie in Chicago. Yes, we’ve emailed Victor. No, we haven’t heard back.

Sayeth Vic:

Thank you for your help Caleb! Its just amazing how many people are pitching in to help find one person. Everyone except for the one person who left a comment on your site (even though it was kind of funny). If you hear anything on the interwebs about this girl let me know! I’m thinking there is a 50/50 chance she has seen this and is highly unimpressed. Oh well you have to try.

Unimpressed? Hardly dude. It’s fate (or something).

[via @retheauditors]

Apparently Dixon Hughes’s Involvement Was Needed to Ensure the Integrity of an Elvis Impersonation Contest

You don’t have to be Young Buck to know that quite a few people take the business of impersonating the King seriously.

Competitiveness (some might call it cheating) in this arena rivals that of SEC football and finding impartial judges is not as easy as you would expect.


Accordingly, a top five accounting firm (Vault) has been retained to quell any concerns you might have:

For the semifinal and final rounds of the Ultimate Elvis Tribute Artist Contest, the accounting firm of Dixon Hughes oversees the scoring and tabulation of the contest judging. Having Dixon Hughes as the official auditor of the event assures that the tabulation is held to the highest standards of integrity and objectivity.

Deloitte Survey: If Everyone Would Get Passionate About Their Job, This Economic Recovery Would Be a Cinch

Doesn’t it sometimes feel like we’re thisclose to breaking out of the economic doldrums? If we just got a little push we’d be back to the McMansions and mall marathons in no time. What’s holding us back, you ask? Ourselves of course!

It’s your lack of enthusiasm about your very own job that is keeping this country from being great again. Forget about Democrats, Republicans (although, it is fun hating both of them, isn’t it?) or quantitative easing (no one really knows what it means, anyway). You have the power deep inside you to change your attitude about being stuck in a gray cubicle for 12+ hours a day in an office with a bunch of jerks and have only limited access to the bathroom.


Deloitte’s survey gets all Tony Robbins on us without the price tag:

According to the Shift Index, the solution lies in empowering passionate employees, those who feel truly engaged with their work and constantly push the performance envelope, by accelerating institutional innovation and driving corporate growth. However, Deloitte’s 2010 Worker Passion Survey – one of several separate studies that feed into the overall Shift Index report – reveals that only 23 percent of U.S. workers are passionate about their current jobs.

“By squeezing resources tighter in response to the near-term downturn, companies risk losing passionate employees,” said John Hagel, co-chairman, Deloitte Center for the Edge. “These individuals will play a critical role in sustaining the extreme performance improvement required for firms to survive and succeed beyond the recovery. Unfortunately, as the recovery picks up steam, these very employees are likely to be the most at risk for fleeing for better employment platforms.”

Right then! And you know what gets people impassioned? Social media of course! Your constant desire to be networking 24/7 with people that are as excited about [insert] as you are. You don’t need to meet a person in the flesh:

“Passionate workers actively seek like-minded people using digital tools and social media to advance dialogue, learning and collaboration,” said Hagel. “Their urge to connect fuels inter-firm knowledge flows, which often go unrecognized but are a vital part of any organization that wants to be successful in today’s hyper-competitive environment.”

So until you’re ready to get drenched in passion for whatever it is that gets your blood boiling (former Jets sideline reporters don’t count) you’re holding this economy back. Hope you sleep well knowing that.

Three Accountants Won Big on Election Day, One Huge Loss and One Race Still Undecided

A quick rundown of the results on the races we told you about yesterday.


• Wisconsin – Ron Johnson won handily over Russ Feingold disappointing liberals like ATL Editor Elie Mystal and served as a pleasant surprise to libertarians like Adrienne who texted us, “WHOA Feingold got taken out in Wisconsin!! I never thought I would see that.”

• South Carolina – Nikki Haley won over Vinny Sheheen. She will be the first female governor in the Palmetto State’s history.

• New York – Joe DioGuardi got trounced by Kirsten Gillibrand who got over 60% of the vote. Harry Reid is double-relieved.

• Michigan – Rick “One Tough Nerd” Snyder cruised to victory over Virg Bernero in the governor’s race, winning by approximately 20 points.

• Virginia – The one race that is still ongoing is in Virginia’s 11th Congressional District between Gerry Connolly and KPMG alum Keith Fimian. The Wall St. Journal reports, “Connolly is leading by 487 votes. Mr. Connolly has 49.2% of the vote, while Mr. Fimian, who lost narrowly to Mr. Connolly in 2008, has 49%,” and Fimian is confident that he’ll be declared the winner.

So for those keeping score, accountants (all GOP, not surprisingly) are 3-1 with one race still too close to call. We’ll be watching the VA11 race until the bitter, bitter end.

The Guy Responsible for Informing Us About Christine O’Donnell’s Pubic Hair Was an Auditor at the Federal Reserve

We’re just catching up to this little twist in the story so keep your pieholes shut. Plus, it’s election day, making it completely appropriate.

Hard to believe that it was just last Thursday when the anonymous first-hand account of a sexless one-night stand with Senate candidate Christine O’Donnell was published over Gawker, grooming details included.

Aside from Christine O’Donnell’s stance on masturbation, witchcraft and her inability to assign anyone to fill out a postcard for her nonprofit organization, we could have done without this particular exposé. An anonymous douche probably thought he would make off with Gawker’s ‘low four figure’ sum and he would be an anonymous anti-tea party hero.


The Smoking Gun immediately was on the case to identify the pube peeker in question and it really didn’t take much effort on their part, as they came to a pretty solid conclusion late on Thursday after speaking with the author’s former roommate, Brad Kursiko:

While Kurisko refused to out “Anonymous,” some online activity this evening may point to the author’s identity. Shortly after his last phone conversation with a TSG reporter, a single name disappeared from Kurisko’s list of Facebook friends.

The man with whom electronic ties were abruptly cut is Dustin Dominiak, a 28-year-old buddy who attended Albion College with Kurisko. Records show that Dominiak has previously shared a Philadelphia address with Kurisko. One online posting reports that Dominiak, a Michigan native, has worked as an auditor at the Federal Reserve in Philadelphia.

TSG finally got Kurisko to confirm Dominiak as the blathering broheim, thus providing him with the unenviable distinction of being “that guy who wrote about Christine O’Donnell’s pubes.” Especially if she manages to pull off the huge upset today.

But more interestingly this whole story has only reiterated our contention that the sex lives of accountants (and by extension, auditors) is completely random and scattered. This particular encounter – Senate candidates and their grooming habits; Philly Fed auditors that will do anything for a buck – might be the apex of the theory.

On The Trail Of “Anonymous,” Christine O’Donnell’s Sex-Free Pal [TSG via DI]

(UPDATE) Accountants to Watch on Election Day 2010

~ Update includes the Michigan Governor’s race.

Here’s a rundown of some of the more prominent races that feature accountants. All of the polling information cited is the calculated average from Real Clear Politics.

• Wisconsin – Republican Ron “There are two many lawyers in the Senate” Johnson leads incumbent Democrat Russ Feingold by approximately 7 points.

• South Carolina – In the Governor’s race, Republican Nikki Haley’s tardy tax filings have not hurt her prospects as she leads Democrat Vincent Sheheen by approximately 11 points.

• New York – Incumbent Senator Kirsten Gillibrand leads Republican Joe DioGuardi by approximately 20 points. For those not familiar with DioGuardi, he is an Arthur Andersen alum who made partner at age 31, was the first practicing CPA elected to Congress and is the father of Kara DioGuardi (ask the person next to you if you don’t know).

• Virginia – Republican Keith Fimian (spent 7 years at KPMG) is in a toss-up race against Democrat incumbent Gerry Connolly in Virginia’s 11th Congressional District.

• Michigan – Republican Gubernatorial candidate Rick Snyder (Coopers & Lybrand alum who made partner in six years) leads his Democratic opponent Virg Bernero by approximately 17 points.

So it looks as though your bean counter brethren will win at least two three races (Haley, Johnson, Snyder) with one certain defeat and one that’s too close to call.

If we’ve missed any accountants-cum-candidates in a Congressional or Gubenatorial race, let us know below or shoot us an email and we’ll update the post. Now go vote.

New York State Comptroller Candidate Harry Wilson Gets an Above Average Endorsement

Namely Third Point boss Dan Loeb. Sure it’s nice if the Times, Journal, Daily News and the Post all give you the thumbs up but if Dan Loeb goes to the trouble of telling his own investors that you need to be the Empire State’s next top accountant, that’s probably a little better than you could hope for.


So if you would like to see the NYS public pension problem fixed, Loeb implores you to vote for Harry Wilson tomorrow. If you’re okay with “New York [going] the way of Greece” then you should vote for the other guy (his name is Frank DiNapoli).

Courtesy of our former sister from another mister site, Dealbreaker:

Dear Friends,

I have chosen only one candidate to bring to your attention, that is Harry Wilson for Comptroller of NY State. He has recently tied incumbent Democratic candidate Thomas DiNapoli in the polls. For those of you who are Democrats, this is not a matter of party politics but literally one of whether we want New York the go the way of Greece and go bankrupt because, trust me, that is the course we are headed towards without sound fiscal leadership.

Daniel Heninger’s WSJ article lays it all out: “New York, like California and many other once-important states, is sitting on a public- pension debt bomb. If it blows, it will take great swaths of the productive American economy with it for years. Harry Wilson thinks he can defuse the New York bomb. If Harry Wilson can get the public-pension death spiral under control in New York—and he just might have the professional and intellectual tools to do it—it should be possible to reform pensions in any state. That matters. The United States needs a growth rate well above the 2%-something that the Obama years have allowed. That means the people in all 50 states have to be pulling on the oars. They won’t be able to do that if their productive energies are being siphoned into more and yet more taxes that will be demanded— indeed virtually mandated—to pay off these pension obligations. It’s Harry Wilson or the deluge.”

Harry and DiNapoli are neck at 44% and which is why it is vital for you and to vote and to please pass this onto anyone else who is registered to vote in New York.

Dan

Since most New Yorkers have no idea who is running for NYS Comptroller this should at least put a memorable name in your head.

Georgia-Pacific Accountant Found Shot to Death; Husband Charged with Murder

Unfortunate story from the Atlanta Journal Constitution today who reports that 25 year-old Madison McLester was shot to death over the weekend. Ms McLester worked at Georgia Pacific in the financial reporting group and was active in the company’s recruiting at Georgia State University.

Police say McLester, 25, who got married last month, was shot to death by her husband early Sunday.

The 2007 GSU grad was found in her southwest Atlanta home; she had been shot several times.

Around 4:40 a.m, authorities responded to a call about a woman being shot, Atlanta police spokeswoman Officer Kim Jones said. They found her husband, Minchillo McLester, walking nude in a nearby park, where he was arrested, police said.

The couple had apparently just returned from a Halloween party.

Michillo McLester, who turned 29 Saturday, was later charged with his wife’s murder. There is currently no motive. We’ll keep you updated.

AICPA Launches Clearly Pretty Awesome Campaign to Target High School Students

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

The American Institute of Certified Public Accountants (AICPA) has launched the Clearly Pretty Awesome Competition for high school students to introduce them to the CPA profession.

“The CPA designation offers many rewarding career paths,” said Jeannie Patton, AICPA vice president – students, academics, and membership. “College students are graduating with degrees in accounting at historically high numbers. Decisions regarding career paths are being shaped very early, many at the high school level. It’s important that students have substantial information about accounting careers before they select their majors at colleges and universities.”


The Clearly Pretty Awesome Competition calls for students to devise a job (other than certified public accountant) using the acronym CPA, such as “curb paint applicator” or “city park accordionist.” To enter the competition, students are encouraged to visit Start Here, Go Places and register using the site’s FutureMe tool, and then submit their entries, along with an explanation as to why being a real CPA is a better option than the job they created.

A panel of judges will select the finalists on November 18 and 19. The top submissions will appear on Start Here, Go Places for public voting beginning on November 29. The AICPA will announce the winning entry on or about December 15, and plans to incorporate it in a national advertising campaign.

There will be 1st through 5th place awards:

• 1st place: A laptop for the student, $3,000 grant awarded to the student’s school in his or her name, use of the entry in the ad campaign, and a poster for school display;

• 2nd place: A laptop for the student, $1,500 grant to the school in the student’s name and a poster;

• 3rd, 4th, and 5th places: An iPod touch for the students.

The competition is open to full-time 15 to 19 year-old students who are enrolled in a high school in the 50 states, District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, American Samoa or the U.S. Virgin Islands. The AICPA will accept entries until Nov. 17.

About the AICPA:
The American Institute of Certified Public Accountants is the national, professional association of CPAs, with 369,000 CPA members worldwide in business and industry, public practice, government, education, student affiliates and international associates. It sets ethical standards for the profession and U.S. auditing standards for audits of private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination.

Ernst & Young Employee Shared Sue Sachdeva’s Taste in Loot, Lacked Her Fraudulent Self-control

If you work for a partner who likes shamelessly showing off their money, it’s likely that you will think to yourself one of two things: 1) “What a flashy douchebag.” OR 2) “How do I get to be that flashy douchebag?”

For Lily Aspillera, her thinking was more along the lines of the latter, as she made off with $1.7 million from 2002 to 2008 by writing checks to herself that drew on an account of an E&Y client. She used the cash to buy your run-of-the-mill embezzler items: German cars, jewels, vacations, a nice home, etc.

An executive assistant at the giant accounting firm Ernst & Young has been sentenced to more than two years in federal prison for a $1.7 million embezzlement scheme that helped finance a posh San Francisco home, two BMWs, jewelry and stays at luxury resorts, authorities said Wednesday.

Lily Aspillera, 65, of San Francisco was ordered Tuesday by U.S. District Judge Susan Illston to serve 30 months behind bars for mail fraud and tax evasion.

Impressive. Not necessarily by Sue Sachdeva’s standards but impressive nonetheless. However, Lil’s little scam only last a measly 6 years compared to Sachdeva’s twelve year scam because yes, her own greed got the best of her:

“Like so many who commit fraud, over time she increased the amount of money she embezzled, apparently emboldened by not getting caught,” Assistant U.S. Attorney Doug Sprague wrote in a sentencing memorandum.

Defense attorney Donald Bergerson wrote in court papers that his client “has been punished by her own conscience as much as she can be punished by any term of imprisonment.”

The personal guilt over getting caught – after managing to steal money for only six years – would be pretty overwhelming.

Ernst & Young employee gets prison in embezzlement [SFC]